The Depressing Energy Debate in America
Anyone hoping to see an end to our policies of encouraging the burning of fossil fuels certainly winced at the energy section of last night’s debate, which did not mention climate change but did feature both candidates trying to convince the country that they would deliver more coal and oil-based domestic energy.
The debate was focused entirely on the turf of the fossil fuel burners, with President Obama making only glancing references to renewables.
The question that prompted this, about the government and gas prices, began from a faulty premise:
QUESTION: Your energy secretary, Steven Chu, has now been on record three times stating it’s not policy of his department to help lower gas prices. Do you agree with Secretary Chu that this is not the job of the Energy Department?
It’s not the policy of the Energy Department to help lower gas prices, because that would be impossible for a US Energy Department to accomplish. Gas prices are set by global demand. For all the boasting from President Obama about “increas[ing] oil production to the highest levels in 16 years,” gas prices have risen and fallen precisely in line with global demand. It doesn’t matter whether we get energy independent or “North American energy independent” or whatever. Obama obliquely referenced this at one point in the debate, rebutting an attack line from Romney about where gas prices were at the start of his Administration:
OBAMA: Well, think about what the governor — think about what the governor just said. He said when I took office, the price of gasoline was $1.80, $1.86. Why is that? Because the economy was on the verge of collapse, because we were about to go through the worst recession since the Great Depression, as a consequence of some of the same policies that Governor Romney’s now promoting.
So, it’s conceivable that Governor Romney could bring down gas prices because with his policies, we might be back in that same mess.
That doesn’t fully connect that, in recession-like conditions, demand plummets. And that determines the price.
And at every point, the focus fell on more drilling, more mining, and more fracking. Obama said that oil production is up, natural gas has boomed, and coal mining employment has increased. That’s all true, even oil production on federally leased lands, where Romney weirdly set the dividing line (oil production on federal land or privately owned land remains oil, as far as I can tell). But why would burning more coal (even the mythical “clean coal,” which got a shout-out from the President) or oil be desirable? The President did try to turn the conversation to renewables, but only after a very long contest over who would burn more fossil fuels:
OBAMA: So, I’m all for pipelines. I’m all for oil production. What I’m not for is us ignoring the other half of the equation. So, for example, on wind energy, when Governor Romney says “these are imaginary jobs.” When you’ve got thousands of people right now in Iowa, right now in Colorado, who are working, creating wind power with good-paying manufacturing jobs, and the Republican senator in that — in Iowa is all for it, providing tax breaks to help this work and Governor Romney says, “I’m opposed. I’d get rid of it.”
That’s not an energy strategy for the future. And we need to win that future. And I intend to win it as President of the United States.
Romney replied to this by saying he “appreciate wind jobs in Iowa.” He does oppose extending the production tax credit for wind, which would decimate the burgeoning wind industry.
One other point I wanted to make. There was this long confrontation over federal lease permits for oil drilling. The fact that we had a rig explode in the Gulf of Mexico and pollute that ecosystem for decades on never entered into this conversation. But the President did put forward this concept of “use it or lose it.” Again, there was one thing missing:
ROMNEY: In the last four years, you cut permits and licenses on federal land and federal waters in half.
OBAMA: Not true, Governor Romney.
ROMNEY: So how much did you cut (inaudible)?
OBAMA: Not true.
ROMNEY: How much did you cut them by, then? [standoffish confrontation, and then…]
OBAMA: Here’s what happened. You had a whole bunch of oil companies who had leases on public lands that they weren’t using. So what we said was you can’t just sit on this for 10, 20, 30 years, decide when you want to drill, when you want to produce, when it’s most profitable for you. These are public lands. So if you want to drill on public lands, you use it or you lose it.
It’s actually more insidious than that. One way that oil companies promote themselves to shareholders is by describing the amount of “proven reserves” they own. This in turn gooses their stock price. The more federal leases oil companies sit on, the more proven reserves they can tout to shareholders, and the more their stock increases. That’s why two-thirds of leased land sits idle. That’s the scam that “use it or lose it” seeks to prevent. Of course, this leads to either a) oil companies using the land or b) it reverting back to the government, who seeks to sell it to someone who will. So it ends up ACCELERATING the amount of oil developed.
We do not have anything approaching a consensus on climate change in America, gas prices are a poorly understood swing-voter issue, and the battleground states in elections mostly come from dirty energy-producing states like Ohio. Virginia, a new swing state, has a lot of coal, and under their current Republican legislature they’ve promoted oil drilling for their coastal regions. And that’s why we get this debate: a little talk of renewables, a little talk of energy efficiency (which is a major Obama accomplishment, in terms of fuel efficiency standards), and the rest on who will burn fossil fuels the fastest.
Photo by Travis S. under Creative Commons license